WORLD TRADE

ORGANIZATION
RESTRICTED

S/C/W/49
23 September 1998

(98-3691)

Council for Trade in Services




EDUCATION SERVICES

Background Note by the Secretariat


This Note has been prepared at the request of the Council for Trade in Services in the context of the
information exchange programme. It intends to provide background information for sectoral
discussions to be conducted by the Council. As with previous sectoral Notes by the Secretariat, this
Note contains basic and general information in order to stimulate the discussion of relevant issues by
Members, and therefore should not be considered exhaustive. Its content, particularly country
specific references, has been solely determined by the availability of information. To facilitate the
preparation of Members, possible issues for discussion have been added at the end of each Section.
They should not be interpreted as indications of any particular interpretations of the GATS or views
held by the Secretariat.
The Note is organized in four Sections plus Annexes and Tables. Section I addresses the definition,
economic importance and market structure of educational services. Section II presents some basic
features of international trade in this sector. Section III provides a brief overview of existing
commitments under the GATS, and Section IV gives further sources which might provide additional
information on the sector.
I. DEFINITION, ECONOMIC IMPORTANCE AND MARKET STRUCTURE OF THE
SECTOR
Definition

Education services are commonly defined by reference to four categories: Primary Education
Services; Secondary Education Services; Higher (Tertiary) Education Services; and Adult Education.
While these categories are based on the traditional structure of the sector, rapid changes taking place
in the area of Higher Education - which normally refers to post-secondary education at sub-degree
and university degree levels - may be significantly affecting the scope and concept of education. This
is reflected, for instance, in recent revisions of the International Standard Classification of Education
1997 (ISCED), which modified the categories related to higher/tertiary education to better reflect
"non-university types" of studies.
1

In addition, changes in the domestic and international market structures, as discussed below, have
promoted the appearance of activities closely related to education services. These new activities are
designed to support educational processes or systems without being "instructional activities" per se.
Examples of these activities are educational testing services, student exchange programme services
and "study abroad" facilitation services. In some countries, these activities are considered to
constitute education services. A more detailed description and comparison of classification systems

1
The International Standard Classification of Education, adopted by UNESCO in 1976, has recently
been modified - ISCED 1997. ISCED provides a basic conceptual framework for statistics on education at the
international level. Its revised version incorporates new levels of education to better reflect the reality of the
sector, e.g. two types of tertiary/higher level studies: "advanced theoretical professional" and
"practical/occupational" have been included.
S/C/W/49
Page 2


related to education services are contained in Annex I. Given the pace of change in the Sector,
definitional issues may be an important consideration in any forthcoming negotiations on additional
commitments in this area.
In scheduling GATS commitments for this sector, most Members have used the United Nations
Provisional Central Product Classification (UN CPC) categories and respective codes. In fact, of the
30 schedules concerned, only three do not contain CPC codes.
2
Of these, only one partially departs
from the CPC category denominations. However, a few Members have introduced additional
distinctions in defining the coverage of their commitments, i.e. private/public education,
3

compulsory/non-compulsory education,
4
international/national school education,
5
and education
granting/non-granting state recognized exams/degrees.
6
These distinctions basically reflect structural
differences among countries relating to their education system.
Economic Importance of the Sector

The crucial role of education in fostering economic growth, personal and social development, as well
as reducing inequality is well recognized. Countries seek to ensure that their populations are well
equipped to contribute to, and participate in, the process of social and economic development.
Education enables them to face the challenges of technological change and global commercial
integration. Through its capacity to provide skills and enable effective participation in the work force,
education is crucial to economic adjustment.
A direct relationship between the level of education and vulnerability to unemployment has been
identified in many countries. For example, in Germany, Spain, France and the United Kingdom, the
unemployment rate of people not continuing past the first level of secondary education has been found
to be significantly higher than for those participating in some form of higher education.
7
Similarly,
many studies for the United States have identified inequality in education and skills as a core factor in
the labour market. Not only are jobs being restructured and moved away from lower-skilled
positions, workers with a lower level of education have also seen their real incomes decline, while
those with a higher level of education have maintained or improved their income position.
8

The education/employment link has resulted in numerous governmental initiatives aimed at promoting
human capital development.
9
The share of public expenditure on education as percentage of GNP has
remained roughly constant over the past decade in most regions.
10
In developed countries, this share
remained at approximately 5.0 per cent of GNP between 1980 and 1994, while in developing
countries it amounted to about 4.0 per cent over the same period. However, on a per capita basis,

2
Hungary, Norway and the United States.
3
Australia, Bulgaria, Czech Republic, New Zealand, Poland, Slovenia and Switzerland.
4
Norway, Switzerland and Liechtenstein.
5
Thailand.
6
Norway.
7
European Commission, 1995, White Paper on Education and Training: Teaching and Learning,
Towards the Learning Society.
8
U.S. Trade and Industry Outlook '98, Education and Training.
9
For example, during the 1980s a number of programmes were undertaken in the EU related to
vocational training, and in 1994 a programme based on the idea of life-long training was also launched.
Similarly, various East and Southeast Asian countries have made generous budgetary provisions for higher
education and explicitly included education in national development plans. For instance, Thailands Eighth
National Economic and Social Development Plan (1996-2001) explicitly emphasises "people development" as
its main goal.
10
UNESCO, Statistical Yearbook 1997, p. 2-29. While the world share of public education expenditure
has remained at 4.8 per cent of GNP, expenditure on education has kept pace with growing economies. Overall,
spending on education grew in the period from 1980 to 1994, with the period from 1985-1990 showing the
greatest increases.
S/C/W/49
Page 3


almost all developed countries exhibited increasing education expenditure, with an overall increase of
almost 150 per cent between 1980 and 1994.
11
While, overall, developing countries also witnessed a
significant increase in per capita expenditure over the same period (55 per cent), certain groups and
regions did not follow this trend, including in particular the least developed countries, Arab States,
Sub-Saharan Africa and South Asia.
12
(see Table 1).
Education is normally regarded as a "public consumption" item, provided in many instances free of
charge or at prices not reflecting the costs of producing it. Government spending has thus remained
the main source of educational funding in most countries. In 1994, OECD countries as a whole spent
5.9 per cent of their collective GDP on education, 80 per cent of which was devoted to direct public
expenditure on educational institutions. For most OECD countries, education represents between 10
and 15 per cent of total government outlays.
13
A recent study (1997) concludes that expenditure on
education per student tends to be higher for richer countries than for poorer countries in the OECD
area, even when controlling for differences in national income levels.
14

Education also exists as a "private consumption" item with a price determined freely by the providing
institutions. Private sector expenditure on educational institutions reveals significant variations among
OECD countries, ranging from 2 per cent or below of total expenditure on education in Portugal,
Sweden and Turkey, to over 22 per cent in Germany, Japan, Korea and the United States.
15
Private
sector expenditure is particularly significant at the tertiary level of education amounting, for instance,
to over half of total private expenditure on education in Japan, Korea and the United States.
16

It is important to bear in mind that cross-country disparities in expenditure levels may not only reflect
different policy priorities, but a variety of economic, social and demographic factors. On the supply
side, the primary factor determining total expenditure on education is staff salaries. Dominated by the
pay of teachers, staff salaries account for over four fifths of current expenditures at the primary and
secondary level in OECD countries, ranging from just under 65 per cent in the Czech Republic and
Sweden to over 90 per cent in Greece, Italy, Portugal and Turkey.
17
Different models of education
may also have very different spending implications. For instance, high-expenditure countries may be
enrolling large numbers of students while low-expenditure countries may be more focused and
selective. On the demand side, overall enrolment levels are determined mainly by the size of the
youth population and participation rates. In other words, the larger the size of the population between
ages 5 and 29, the more a country can be expected to spend on education.
18


11
Ibidem. Overall developed country spending rose from US$487 per inhabitant in 1980 to US$1211
per inhabitant, while the share of spending remained constant at about 5 per cent.
12
Ibidem.
13
OECD, Education at a Glance Indicators, 1997, pp.67-69.
14
OECD, Education Policy Analysis, 1997, p. 10.
15
OECD, Education at a Glance Indicators, 1997, p. 54. On average for the OECD area, in 1994 the
private sector provided approximately 20 per cent of aggregate expenditure on educational institutions. These
figures are net of public subsidies.
16
Tertiary level of education refers to a level of broadly defined studies, provided through established
forms of higher education (mainly colleges, polytechnics, universities), but also in other ways through new
kinds of institutions, by enterprises and in other non-formal settings.
17
OECD, Education Policy Analysis, 1997, p. 17.
18
Ibidem, p. 16.
S/C/W/49
Page 4


Changing Structure of the Education Market

Given its importance for human and social development, countries throughout the world tend to
consider instruction up to a certain level commonly primary and secondary education - as a basic
entitlement. It is normally provided free of charge by public authorities and, in most countries,
participation is mandatory. In addition, some degree of private participation in the supply, which
varies among countries, exists as well. However, the underlying institutional arrangements may be
very diverse, making the separation of public and private domains not always clear. For example,
private educational institutions may be highly subsidized and provide services like, or close
substitutes to, those offered by the public sector. On the other hand, certain private institutions may
offer services at market conditions (e.g. language schools).
Basic education provided by the government may be considered to fall within the domain of, in the
terminology of the GATS, services supplied in the exercise of governmental authority (supplied
neither on a commercial basis nor in competition).
19
The fact that the following presentation does not
discuss this segment of the sector is by no means intended to indicate a lack of social or economic
significance. However, since the purpose of this Note is to discuss trade in education services, the
focus is necessarily on those segments where a relatively small, but possibly growing, number of
countries allows for effective private participation.
Education systems in some countries have been rapidly evolving since the mid-1970s. New types of
courses and training programmes, various forms of apprenticeship and alternative training schemes
have been introduced.
20
Additional emphasis has been placed on tertiary/higher
21
education, and in
particular on "adult learning" which involves education services for persons who are not in the regular
school or university system. For instance, countries such as Sweden, Australia, United Kingdom,
Japan and New Zealand are said to have adopted policies to foster participation in different types of
tertiary level institutions.
22

The participation of young people and, particularly, adults in tertiary education has tended to rise in
the OECD area. This increase has been driven by new consumer needs and interests, which in turn
have led tertiary education systems to diversify programmes, structures, and styles of delivery. Major
supply-side responses have been manifested in the emergence of "non-university" institutions and
programmes; the networking of institutions and programmes; "franchise" arrangements ; and
increased emphasis on distance learning.
23
(See Table 2)
Distance learning has been a very dynamic area, benefitting from the development of new information
and communication technologies such as cable and satellite transmissions, audio and video
conferencing, PC software and CD-ROMs, and in particular the Internet.
24
The Internet is perceived
as an important contributor to the recent changes in higher education. Not only is it improving
existing forms and structures of tertiary education e.g. by building on-campus information
infrastructure but it has also introduced changes to the processes and organization of higher
education (e.g. from institution-centred and faculty-centred instruction to student-centred learning).
Thus, for example, University of California Los Angeles (UCLA) Extension school in the U.S.,
jointly with the Home Education Network, is offering some 50 courses over the Internet reaching
students in 44 U.S. states and in 8 countries. Similarly, Duke Universitys Fuqua School of Business
offers a Global Executive MBA program by e-mail over the Internet; nearly half of those enrolled in

19
Basic Education refers to primary and secondary education.
20
OECD, Education and Employment, 1995, Chapter 3.
21
These two terms are used interchangeably in this Note to refer to studies beyond the secondary level.
22
OECD, Education Policy Analysis, 1997, p. 80-95.
23
Ibidem.
24
Walter S. Baer, "Will the Internet Transform Higher Education?" in The Emerging Internet, Annual
Review of the Institute for Information Studies, Queenstown, MD, 1998, pp. 81-108.
S/C/W/49
Page 5


this program live outside the United States.
25
In the same vein, Stanford University is preparing its
first online degree programme a Masters degree in electrical engineering. Those applying for the
programme will be competing with electrical engineering students who intend to complete their
degree in the conventional way on campus.
26

In addition, available sources emphasize the emergence of innovative institutional arrangements
between public and private entities, both within and across national boundaries.
27
One commonly
cited example is the Western Governors University
28
, which was founded by 17 governors of
Western U.S. States and includes private sector partners such as IBM, AT&T, Cisco, Microsoft, and
International Thomson. This independent, non-profit, accredited, and degree-granting entity does not
employ a teaching faculty or develop its own courses; its academic content comes from faculty
"providers" employed by other public and private institutions. It reaches students through the Internet
and other distance learning technologies. This type of entity is commonly referred to as a "Virtual
University".
Several European countries have foregone detailed regulation of university operations for new
framework laws which indicate goals, but allow institutions to find their own ways of achieving
them. Rather than presenting detailed budgets to be followed, some governments are giving financial
support as a lump sum for universities to spend as they deem appropriate. These reforms offer
institutions greater autonomy in terms of the right to establish or close faculties or departments, or to
develop interdisciplinary structures and programmes, which are perceived as being relevant to new
trends in business, science and society. Consequences of this shift in control have included less
government funds, more competition, and institutional reforms to cut costs and raise revenues. These,
in turn, have resulted in an effort to attract more fee-paying students, including foreign ones.
29

In the United Kingdom in the 1980s, a movement away from public financing and toward greater
market responsiveness, coupled with an increasing openness to alternative financing mechanisms, has
led universities in new directions, balancing academic quality with business management.
30
Similarly
in the Netherlands, some institutions have seen the need to attract new funding and behave in a more
entrepreneurial fashion by providing their services to businesses, e.g. contracting to perform applied
research for small and medium enterprises.
31


25
Gubernick and Ebeling, I Got My Degree Through E-Mail, Forbes, June 1997.
26
Financial Times, "Online degree",3 August 1998.
27
Walter S. Baer, "Will the Internet Transform Higher Education?" in The Emerging Internet, Annual
Review of the Institute for Information Studies, Queenstown, MD, 1998, pp. 81-108.
28
Web site: http://www.wgu.edu
29
Recent trends in U.S. Services Trade, Publication 3105, May 1998.
30
Burton Bollag, European Universities Expect Less Support From Governments and More
Competition, The Chronicle of Higher Education, October, 1997.
31
For example, a study points at Twente University, among others in the Netherlands, as a model in
combining entrepreneurship with maintaining high academic standards. Source: Burton Bollag, "Twente
University in the Netherlands Adapts to Changes in Europe Higher Education", The Chronicle of Higher
Education, November, 1997.
S/C/W/49
Page 6


Institutional and policy changes in some ASEAN countries have involved restructuring of public
universities and allowing the establishment of private universities in countries where they did not
exist. Also, foreign institutions have been permitted to provide higher education in some instances.
32

In Malaysia, a recently implemented policy promotes the "corporatization" of public universities,
providing them scope for remunerative activities to supplement public funding.
33
The results of these
policies have been to increase competition and encourage investor and corporate participation in the
education sector.
Issues for Discussion:

- Do Members see a need to take into account the distinctions between private/public,
compulsory/non-compulsory, national/international, and degree/non-degree granting
education, for the future scheduling of commitments in the sector?
- Possible impact of domestic institutional reforms on international trade in education services.
- Role of distance learning for education in developing countries, and possible contribution of
reforms in telecommunications.

I. INTERNATIONAL TRADE IN THE SECTOR
International trade in education services has experienced important growth in particular at the tertiary
level. This is demonstrated by the increasing number of students going abroad for study, exchanges
and linkages among faculties and researchers, increased international marketing of curricula and
academic programmes, the establishment of branch campuses, and development of international
mechanisms for educational cooperation between academic institutions in different countries.
34

By the early 1990s, over 1.5 million tertiary level students were studying abroad. In the U.S. during
1989-93, foreign student enrolment in higher education grew at rates ranging between 3 and 6 per cent
per annum; during 1996/97 foreign students in U.S. colleges and universities totaled 457,984, up from
453,787 the previous year.
35
By 1995, the global market for international higher education was
estimated at US$27 billion.
36

The United States is the leading exporter of education services, followed by France, Germany, and the
United Kingdom (see Table 3).
37
In 1996, U.S. exports of education services were estimated at
US$7 billion, which made higher education the country's fifth largest service sector export. Main
export markets are in Asia (Japan, China, Korea, Taiwan, India, Malaysia and Indonesia), accounting
for 58 per cent of all U.S. exports of education services, followed by countries in Europe and Latin
America. However, the U.S. is facing increasing competition from other countries, such as Australia
and the United Kingdom, mainly for Asian students.
38
On the import side, it is reported that nearly
two-thirds of U.S. students studying abroad choose institutions in Western Europe (main destinations

32
Martin Rudner "International Trade in Higher in Higher Education Services in the Asia Pacific
Region", World Competition, 1997, (21) No.1, p.p. 88-116.
33
Ibidem.
34
Ibidem.
35
NAFSA Website, "International Student Enrolments at US Universities Remain Flat in 1996-1997",
News from Open Doors, Dec 1997, http://www.nafsa.org/retrieve/2.46/246.4.txt
36
Martin Rudner "International Trade in Higher in Higher Education Services in the Asia Pacific
Region", World Competition, 1997, (21) No.1, p.p. 88-116.
37
UNESCO, Statistical Yearbook, 1997.
38
For example, in 1994 some 70,000 foreign students, mainly from Asia, were enrolled in Australian
institutions, contributing about A$2 billion to the economy. More recently, Canada has come to compete
successfully in the recruitment of foreign students as well.
S/C/W/49
Page 7


being the UK, France, Spain and Italy) followed by Latin America. U.S. education imports totalled
US$1 billion in 1996.
39

The above figures are based on the number of students enrolled in educational institutions outside
their home-country.
40
Therefore, they do not take into account students receiving education in their
home-country from foreign providers. As explained below, this may include students participating in
international distance learning programmes, enrolled in foreign universities providing
courses/programmes using their own faculty and facilities, or being instructed by visiting foreign
teachers or trainers. Although no estimates on these transactions are available, they are likely to be
significant.
Further, available data on the education sector do not normally include so-called corporate education
or training. This segment of the sector is increasingly important at the international level as
multinational corporations tend to conduct home-country produced educational programmes for their
personnel. They may seek to strengthen their corporate identity and/or compensate for the lack of
appropriate facilities or expertise in their host-country. The provision of an educational programme
might be contracted out to institutions in third countries or provided in-house by the corporation.
41

Education Services Trade by Modes of Supply

As noted above, education services are traded predominantly through student mobility across borders
(consumption abroad). The rising competition for foreign students, due not only to economic but also
cultural policy reasons, has been accompanied by initiatives in the marketing of higher education
institutions. Such initiatives, sponsored by governments, universities, or private firms, consist of
dissemination of information on the institutions and recruiting students. For example, the so-called
"education fairs" are one of the most common mechanisms used by governments and institutions,
either directly or through education marketing agencies.
42
For data on leading exporters through
consumption abroad and the origin of students see (Table 4).
In addition, a more recent form in which education services are traded consists of the setting up of
facilities abroad by education providers (commercial presence). Although there are no figures
available, the literature suggests an increase in the presence of foreign suppliers in some countries
driven by a variety of reasons. For instance, in an effort to enhance domestic capabilities in higher
education as well as reduce foreign exchange costs derived from outflows of students, several Asia
Pacific countries are allowing foreign universities to establish "local branch campuses" or
"subsidiaries" - e.g. Massachusetts Institute of Technology from the U.S. is in the process of
establishing a locally-financed subsidiary of its faculty of Engineering in Malaysia.
43
This type of
trade is also taking place through partnership arrangements; for example, Open University from the
UK is planning to enter the U.S. market through partnership with Florida State University, among
others.
44

Other types of institutional arrangements, through which commercial presence takes place include so-
called "twinning arrangements". They are relatively frequent in South-East Asia and consist of

39
NAFSA Website, "International Student Enrolments at US Universities Remain Flat in 1996-1997",
News from Open Doors, Dec 1997, http://www.nafsa.org/retrieve/2.46/246.4.txt
40
Thus, in those countries for which data are available the estimated tuition and living expenses of
foreign students are considered to be education services exports.
41
Marjorie Lenn, "The Global Alliance for Transnational Education: Transnational Education and the
Quality Imperative", Source: http://www.lmcp.jussieu.fr/evnis/congress/papers/0319001.html
42
Martin Rudner "International Trade in Higher in Higher Education Services in the Asia Pacific
Region", World Competition, 1997, (21) No.1, p.p. 88-116.
43
Ibidem.
44
Ted Marchese, Not-so-distant Competitors: How New Providers are remaking the post secondary
market-place", AAHE Bulletin, May 1998.
S/C/W/49
Page 8


domestic private colleges offering courses leading to degrees at overseas universities.
45
Institutions
with twinning arrangements have adopted the programme design of the "partner" abroad to validate
the "in-country" courses, validating also the instructional methods and examination standards. Thus,
"twinning arrangements" have led to "franchising" of individual components of the activity, e.g.
courses and programmes. An example of this type of transaction is the franchising of art and design
courses by London Institute (UK) to Colej Bandar Utama in Malaysia.
46

Possibly due to the fact that international trade in the sector focuses on the mobility of students, no
comprehensive information on the movement of scholars (presence of natural persons) was found.
Nevertheless, some inferences can be drawn from the fact that foreign scholars lecturing in the U.S.
totaled 62,350 in 1996/97, up 5 per cent from the preceding year.
47
A similar lack of information
exists in relation to cross-border supply of education services. As noted above, ample demand for
higher education, triggered by the needs of the labour market, and the emergence of new technologies
are rapidly expanding the market share of distance learning. Such an expansion is likely to have a
growing international component, but its potential for changing the current patterns of trade in the
sector is difficult to assess at this stage.
Barriers to Trade

Given that the bulk of trade in the sector takes place through consumption abroad, measures
restricting the mobility of students may warrant particular attention. Direct restrictions generally take
the form of immigration requirements and foreign currency controls.
48
Moreover, representatives of
the education industry have indicated various indirect barriers. These include in particular the
difficulties faced by students in translating degrees obtained abroad into national equivalents, a
process which often appears to be based on subjective criteria. In this regard, the development of
agreements concerning standards for professional training, licensing and accreditation might
significantly benefit trade in this mode, as foreign-earned degrees become more portable. On the
other side, there are signs that internationally oriented companies, aware of the importance of the
qualifications obtained abroad, do not strongly rely on formal certification and/or recognition.
With respect to establishing commercial presence, potential barriers include the inability to obtain
national licences (e.g. to be recognized as a degree/certificate granting educational institution),
measures limiting direct investment by foreign education providers (e.g. equity ceilings), nationality
requirements, needs tests, restrictions on recruiting foreign teachers, and the existence of government
monopolies and high subsidization of local institutions. For instance, while allowing foreign
education providers in their market, some countries do not legally recognize them as universities,
restricting the granting of university degrees to domestic institutions.
49
In some cases, students
enrolled in these institutions might not qualify for benefits like student transportation passes and
financial assistance.

45
Studies are initiated locally and concluded abroad. Source: Martin Rudner "International Trade in
Higher in Higher Education Services in the Asia Pacific Region", World Competition, 1997, (21) No.1, p.p. 88-
116.
46
Ibidem.
47
NAFSA, IIE News from Open Doors, December 1997. Most of these scholars came from China,
Japan, South Korea, and Germany.
48
For example, university representatives in the U.S. expressed concern about the adverse effect on
students mobility of U.S. immigration and labour policies. See General Agreement on Trade in Services:
Examination of the schedules of commitments submitted by Asia/Pacific Trading Partners, USITC, Publication
3053, 1997, and Industry & Trade Summary, Education Services, USITC Publication 2920, 1995.
49
For example, the Japanese Ministry of Education does not recognize affiliates of U.S. higher
education institutions in Japan. As a result, these institutions have been unable to provide education services to
Japanese students wishing to obtain positions in the government or Japanese corporations. Source: General
Agreement on Trade in Services: Examination of Major Trading Partners Schedules of Commitments, USITC
Publication 2940, December 1995, p. 4-3.
S/C/W/49
Page 9


The types of restrictions mentioned above are also relevant to the presence of natural persons,
particularly those concerning immigration requirements, nationality conditions, needs tests, and
recognition of credentials. For example, nationality conditions exist for teachers and board members
in Greece, and France limits the inflow of foreign professors through various regulations concerning
length and stay, payments of taxes, and needs tests.
50

Various initiatives are aimed at enhancing the mobility of consumers and providers of education
services; they are accompanied by efforts among relevant bodies to ensure the quality of the service,
e.g. programmes and instructional methods.
51
Such initiatives may take the form of:
Student exchange programmes, underpinned by inter-governmental or inter-institutional
arrangements. For instance, recently the Malaysian government proposed a student exchange
programme based on study abroad arrangements between its universities and institutions in
Europe and elsewhere;
52

Bilateral educational agreements, concluded at governmental and/or non-governmental level.
These are mostly aimed at fostering student exchanges along with scientific and technological
cooperation. For instance, some Canadian provinces have signed educational agreements
with Thailand and some Canadian universities with institutions in Taiwan;
53

International initiatives relating to the recognition of courses, programmes, studies, diplomas
and degrees in tertiary education. For instance, the Convention on the Recognition of
Qualifications Concerning Higher Education in the European Region", co-sponsored by the
Council of Europe and UNESCO, was concluded in April 1997 to facilitate international
exchanges of students and scholars by establishing standards for the international evaluation
of secondary and post-secondary credentials. Signatories include the European Union, many
East European countries, Australia, Canada, Israel and the United States.
54
(See Annex II)
The growth in internationally traded education services is likely to have a profound impact on the
higher education system of some countries and the economics of education. In some instances, higher
education institutions are being forced to look for alternative sources of funds while investors are
being encouraged to enter a new industry. This situation has been perceived as involving the risk that
in the rush to become market-oriented, universities might be distracted from their educational
missions. On the other hand, it is questioned whether higher education can be profitable for private
investors without public subsidies. In addition, while access to international education may enhance
domestic institutional and human capacities and promote development, flows of people and exposure
to new ideas can arguably have a challenging impact on the structure of relatively fragile societies and
touch on cultural sensitivities.
55

Issues for Discussion:

50
Ibidem, p. 4-5.
51
For example, the 1989 agreement among the engineering accreditation bodies of Australia, Canada,
Ireland, New Zealand, United Kingdom and United States, to recognize the substantial equivalence of their
respective processes for accrediting engineering programs. The accrediting bodies can make recommendations
to licensing authorities in their home countries that programmes in other participating countries be treated as
equivalent.
52
Martin Rudner "International Trade in Higher in Higher Education Services in the Asia Pacific
Region", World Competition, 1997, (21) No.1, p.p. 88-116.
53
Ibidem.
54
Other initiatives at the international level include efforts among institutional accreditation bodies for
the recognition of the equivalence or substantial comparability of processes for "accrediting educational course,
programmes, etc."
55
Martin Rudner "International Trade in Higher in Higher Education Services in the Asia Pacific
Region", World Competition, 1997, (21) No.1, p.p. 88-116.
S/C/W/49
Page 10



- Does the substantial role of the government in education - as provider, financial supporter,
regulator and promoter - have implications for the treatment of the sector under the GATS?
- What is the impact of liberalisation of international trade in education on the quality and
availability of education services in developing countries?
- Given the importance of consumption abroad for trade in education services, and the gradual
opening of education markets through modes 1 and 3 (cross border supply and commercial
presence), how can problems of non-recognition of diplomas/degrees granted by foreign
providers be prevented from frustrating the expected gains in market access? Are these
problems sufficiently addressed by GATS disciplines?
- Do Members see a need to encourage national education administrations to focus more
closely on possible links between ongoing regulatory developments and GATS obligations?
Are the entities involved in regulating the sector sufficiently aware of GATS implications?
- How do Members assess the experience so far regarding the notification of existing or
impending recognition agreements of qualifications and educational standards under
Article VII:4 of the GATS?
- To what extent can the initiatives in UNESCO, and possibly other fora, regarding issues
pertaining to international trade in education services (Transnational Education in the
UNESCO context), benefit future work in the WTO?

II. CURRENT COMMITMENTS UNDER THE GATS
In the following overview of commitments, the level of sectoral coverage will be discussed separately
from the level of modal coverage. In turn, modes 1, 2 and 3 (i.e. cross-border supply, consumption
abroad, and commercial presence), where access is determined mainly by sector-specific
commitments, will be addressed separately from mode 4 (presence of natural persons). Reference to
the Horizontal Sections will be made whenever relevant.
In addition, the discussion will primarily focus on the commitments regarding market access, since in
a majority of schedules (18 out of 30 with commitments in education) the undertakings for national
treatment mirror those for market access. In the few cases where the entries for a given mode under
market access and national treatment differ, slightly more than half of the Members have committed
in full for the latter (7 schedules out of 12). The existing limitations are not specific to the education
sector, for example, no reservation regarding non-recognition of diplomas/degrees granted by foreign
providers is found. Current horizontal limitations normally provide for differential treatment
regarding subsidies, acquisition of real estate, investment (in state-owned enterprises for example),
nationality requirements for the majority of boards of directors of legal entities, and differential tax
treatment.
Sectoral Coverage
Education services is the least committed sector after energy services. Thirteen of the thirty
schedules
56
have included commitments for at least 4 of the 5 subsectors.
57
Thus, the number of
schedules containing commitments on the different education subsectors is relatively constant: 21 on
primary education, 23 on secondary education, 21 on higher education and 20 on adult education.
The least frequently committed subsector is "other education", listed in 12 schedules. Although the
latter segment is a residual category with no specified content in the UN CPC, Members have not felt

56
Since the schedule of Austria has not yet been integrated into that of the European Communities and
their Member States, Austria is counted independently (Finland and Sweden have not taken any commitments in
the sector).
57
These Members are: Czech Republic, Lesotho, EU, Hungary, Japan, Liechtenstein, Mexico, Norway,
Poland, Sierra Leone, Slovak Republic, Switzerland and Turkey.
S/C/W/49
Page 11


the need to clarify its content. Only two schedules of the 12 give some indication as to the activity
that has been committed.
Wide-ranging sectoral coverage is more prevalent in the schedules of developed countries and
countries in transition than in those of developing countries. Nevertheless, there are exceptions; two
of the most comprehensive schedules are those of two least-developed countries.
58
(For a summary of
commitments see Table 5).
Modal Coverage

In examining the level of commitments, a distinctions will be made between (a) full commitments,
representing a "none" entry against a particular mode of supply with respect to market access and
denoting the absence of any limitation; (b) no commitment representing an "unbound" entry against
the relevant mode; and the intermediate case, (c) partial commitments which refer to those entries
conditioned in some way by a limitation. (See Table 6).
Schedules containing full commitments for market access across modes 1, 2 and 3 are most common
in relation to the "adult" and "other education" subsectors, in which more than half of the schedules
are free of limitations.
59
By contrast, full commitments in modes 1, 2 and 3 for the primary,
secondary and higher education subsectors are contained in only one-quarter of the schedules.
60

Regarding cross border supply (mode 1), primary and secondary education have been fully committed
in approximately half of the schedules.
61
The corresponding share for "higher" and "other education"
is higher, where over three quarters of all existing commitments are without limitations.
62
The few
partial commitments for mode 1 result from the scheduling of sector-specific limitations such as
restrictions on the granting of financial assistance for studies abroad, restricting the supply of the
service only to foreign students in the country, and nationality requirements.
Limitations on the consumption abroad (mode 2) of education services are very rare in all subsectors.
As in many other services areas, Members saw less need - or scope for restricting trade under this
than any other mode of supply.
63
The very few partial commitments in mode 2 are due to similar
limitations as found in the mode 1 partial commitments.
For both modes 1 and 2, the consideration of the sector-specific commitments in conjunction with the
Horizontal Section of the schedules does not substantially reduce the overall level of full
commitments. The very few limitations listed refer to subsidies and other forms of public assistance,
and foreign exchange restrictions.
Regarding commercial presence (mode 3), most of the commitments scheduled are partial, with the
exceptions of "adult" and "other education" in the individual subsectors. In the latter areas, three-
quarters and half of the schedules, respectively, contain full commitments.
64
The partial or restricted
nature of the mode 3 commitments is determined by sector-specific as well as horizontal limitations.
Examples of listed measures that seem to be more specific to education are restrictions on: financial
assistance for studies at non-certified/recognised institutions; student population to be targeted (e.g.
foreign institutions are only to enrol foreign students); establishment of commercial or for-profit
juridical persons; the granting of state recognised diplomas/degrees by private institutions; and access

58
Sierra Leone and Lesotho.
59
Adult 11 of 20, other 7 of 12.
60
Primary 4 of 21, secondary 5 of 23, higher 6 of 21.
61
Primary 11 of 21, secondary 12 of 23.
62
Higher 16 of 21, other 17 of 20.
63
Full commitments: Primary 17 of 21, secondary 19 of 23, higher 18 of 21, adult 19 of 20, other 12
of 12.
64
Adult 15 of 20, other 6 of 12.
S/C/W/49
Page 12


for publicly funded institutions. Other more commonly listed restrictions relate to authorization or
licensing requirements, the types of legal entity, real estate acquisition, and participation of foreign
capital. (See Tables 7-8 for information on types of measures).
Commitments regarding Mode 4 (presence of natural persons) are largely similar to those for other
sectors, guaranteeing entry, subject to qualifications, only to certain categories of persons. Of the 30
schedules 25 extend existing horizontal commitments and restrictions. The remaining schedules
commit market access for natural persons with no or few limitations.
65

MFN Exemptions

MFN exemptions have been taken by 15 of the 30 Members with commitments on education
services.
66
None of these Members have listed exemptions specific to education. Most of the existing
MFN exemptions are designed to provide cover for preferential treatment on the basis of bilateral
agreements; three Members have included reservations allowing for reciprocity.
67
The preferential
treatment relates mostly to movement of natural persons supplying services, promotion and protection
of investment, and right of establishment of juridical persons.
Issues for Discussion:

- How far do current commitments reflect actual access conditions?
- How far do they reflect restrictions that scholars and students may consider as particularly
onerous? What is the relative importance of domestic regulation falling under Article VI?
- Article XVII of the GATS relates to all measures that modify the "conditions of competition"
to the detriment of foreign suppliers of like services. What is the status of mesures
conditioning a) financial support to students, and b) recognition of diplomas/certificates on
the nationality of the education service supplier?


III. OTHER SOURCES OF INFORMATION
Various sources of information have been consulted in preparing this Note, including publications by
intergovernmental organisations, educational services intermediaries, professional associations, and
individual providers. The following is a selection of sources which may be of assistance to Members.
Name Contact Information
UNESCO Bucharest European Centre for
Higher Education CEPES


39, Stirbei Voda Str.
R-70732 Bucharest
Romania
Tel: 40-1-3159956 / 3120469
Fax: 40-1- 3123567
CEPES Online http://www.cepes.ro
OECD - Centre for Educational Research and
Innovation (CERI)
2, Rue Andr Pascal
F-75775
Paris-Cedex 16
France
Tel: 33-1-45 24 82 00
Fax: 33-1-45 24 91 12
Online http://www.oecd.org//els/edu/els_ceri.htm

65
Haiti, Mali, Rwanda, Trinidad and Tobago, and Turkey.
66
Austria, Costa Rica, EU, Jamaica, Liechtenstein, New Zealand, Norway, Panama, Poland,
Sierra Leone, Switzerland, Thailand, Trinidad and Tobago, Turkey, USA.
67
EU, Liechtenstein, Turkey.
S/C/W/49
Page 13


Name Contact Information
USITC United States International Trade
Commission, Office of Industries
500 E Street, SW
Washington, DC 20436
Tel: 1- 202 205 1819
Online http://www.usitc.gov
NAFSA Association of International Educators
Publication: International Educator
1875 Connecticut Avenue, NW
Suite 1000
Washington, DC 20009-5728
USA
Tel: 1-202-4624811
Fax: 1-202-6673419
NAFSA Online http://www.nafsa.org
IIE Institute of International Education
Publication: Open Doors
809 United Nations Plaza
New York, New York 10017-3580
USA
Tel: 1-212-9845375
Fax: 1-212-9845358
IIE Online http://www.iie.org
IDP, Education Australia
Ground Floor
The University Centre
210 Clarence Street
Sydney, NSW 2000
Australia
Tel:11-61-2-9373-2720
Fax:11-61-2-9373-2724
IDP Online http://www.studyabroad.com
AAHE American Association for Higher
Education
National Center for Higher Education
One Dupont Circle, NW, Suite 360
Washington, DC 20036
Tel: 1-202-2936440
Fax: 1-202-2930073
Online http://www.aahe.org
Global Alliance for Transnational Education
(GATE)
GATE is a non-profit alliance founded to address
issues of quality assurance for educational
programmes and services which cross national
borders, promoting transnational education as a
viable means of delivering education to the world
population. Its constituents include national
associations, accrediting and licensing
authorities, institutions of higher education
world-wide, and multinational corporations.
National Center for Higher Education
One Dupont Circle, NW, Suite 515
Washington, DC 20036
Tel: 1-202-2936104
Fax: 1-202-2939177
GATE Online http://www.edugate.org
CADE - Canadian Association for Distance
Education
CADE Secretariat
Suite 205
One Stewart Street
Ottawa ON K1N 6H7
Canada
Tel: 613- 2303630
Fax: 613- 2302746
Online http://www.cade-aced.ca

S/C/W/49
Page 14


ANNEX I
DEFINITION OF EDUCATION SERVICES
International data collection efforts have generally shown that, although countries have
similar denominations of industries, the content may differ. This might be particularly relevant in
cases where Members have undertaken commitments with no clear indication of the activities referred
to, for example, by inscribing only "Other Education Services". Commonly used industry
classification systems might provide some clarification as to the range of activities considered as
education services.
The Services Sectoral Classification List, Document MTN.GNS/W/120, was developed
during the Uruguay Round for scheduling purposes under the GATS. It was based on the UN
Provisional Central Product Classification (CPC) and the activities covered are defined through
reference to CPC codes. Although WTO Members are not legally bound to determine the sectoral
scope of their commitments according to this classification, a large majority has done so.
According to the MTN.GNS/W/120, Education Services include:
A. PRIMARY EDUCATION SERVICES (CPC 921), which comprises Preschool Education
Services (CPC 92110) and Other Primary Education Services (CPC 92190). These categories
do not include child-care services (considered as social services in CPC 93321) and services
related to literary programmes for adults, which are part of the sub-category Adult Education
Services (CPC 92400).

B. SECONDARY EDUCATION SERVICES (CPC 922), which comprises General Secondary
Education Services (CPC 92210), Higher Secondary Education Services (CPC 2220),
Technical and Vocational Secondary Education Services (CPC 92230), and Technical and
Vocational Secondary Education Services for handicapped students (CPC 92240).
C. HIGHER EDUCATION SERVICES (CPC 923) including Post-Secondary Technical and
Vocational Education Services (CPC 92310) and Other Higher Education Services
(CPC 92390). The former refers to sub-degree technical and vocational education, while the
latter refers to education leading to a university degree or equivalent.
D. ADULT EDUCATION (CPC 924) covering education for adults outside the regular
education system.
E. OTHER EDUCATION SERVICES (CPC 929), covering all other education services not
elsewhere classified, and excluding education services regarding recreation matters, for
example, those provided by sport and game schools, which fall under sporting and other
recreation services (CPC 964). For complete definitions see (Table 9).
The Central Product Classification Version 1.0 (CPC Rev.1), approved by the UN Statistical
Commission in February 1997, maintains a full correspondence with Provisional CPC except in two
instances. First, in the relevant correspondence tables, Technical and Vocational Secondary
Education (CPC Rev.1 9223) is now defined to include Technical and Vocational Secondary
Education for handicapped students (CPC 224); and second, group Adult Education Services n.e.c
(CPC 924) and group Other Education Services (CPC 929) have been merged into "Other Education
and Training Services" (CPC Rev.1 929). The definitions contained in CPC Rev.1 do not differ
substantially from those contained in CPC. For example, no explicit reference to handicapped
students is made in CPC Rev.1 9223; and no explicit reference is made to the inclusion of education
services through radio or television broadcasting or by correspondence in the case of CPC Rev.1 924.
Additionally, the definition of the latter has been made more descriptive through the listing of some
S/C/W/49
Page 15


included activities, such as Education Services for Professional Sports Instructors and Computer
Training Services.
In the International Standard Industrial Classification (ISIC)
68
, as well as in the General
Industrial Classification of Economic activity within the European Communities (NACE)
69
, the
education services sector is structured along the lines of UN CPC. Thus, part of the industry is clearly
identified by levels of education within the regular school and university system, while the other part
consists of education outside of the regular system.
70

In the North American Industry Classification System (NAICS),
71
the Education Services
sector is structured according to level and type of educational services. Part of the industry groups
corresponds to a recognized series of formal levels of education designated by diplomas and degrees.
These groups would be the equivalent to those in the "regular school and university system"
categories in UNCPC. The remaining groups are based on the type of instruction or training offered
and the levels are not formally defined, explicitly including "non-instructional services" that support
educational processes or systems. Examples of these activities are: the offering of apprenticeship
training programmes, foreign language instruction; training for career development (provided either
directly to individuals or through employers' training programmes); exam preparation tutoring; and
educational support services - educational consultants, education guidance counselling, educational
testing services, student exchange programmes, among others. Presumably these activities would be
the equivalent to "Adult and Other Education Services" in the context of ISIC, NACE and UNCPC.
While the definition of "Adult and Other Education Services" adopted by these classifications is far-
reaching (i.e. education for adults outside of the regular school and education system, all other
education services not definable by level, and education in specific subject matters not elsewhere
classified), it does not specify the nature of those activities or what is meant by "education".
72
It is
unclear, for instance, whether this residual category covers only "educational services" defined as
instructional activities, in turn creating uncertainty as to the coverage of the so-called "educational
support services".
Issues for Discussion:
- Do Members see a need to clarify the coverage of activities related to education services
which are not instructional in nature, such as college selection services, educational
consultants, educational counselling services, student exchange programmes, educational
testing services, etc?

68
United Nations Industrial Classification System ST/ESA/STAT/SER.M/4/Rev.3.
69
Coding standards used by Member States of the European Communities when reporting data to
EUROSTAT.
70
The levels considered are those of the International Standard Classification of Education (ISCED),
adopted by the International Conference on Education in 1975. This classification has been criticised because its
definition makes a distinction between "regular school and university education" on the one hand, and "adult
education" on the other a distinction that has been regarded as not being clear enough. For example, it
presents problems in the area of apprenticeship.
71
An industrial classification system developed jointly by the statistical agencies of Canada, Mexico
and the U.S. Recently, it replaced the previously used Standard Industrial Classification (SIC) in the U.S.
72
In ISCED 1997 education is defined as deliberate and systematic activities structured to meet
learning needs. It is understood to involve organized and sustained communication designed to bring about
learning, including cultural activities and training.
S/C/W/49
Page 16


ANNEX II

Conventions of a Standard-Setting Nature adopted under
the auspices of UNESCO solely or jointly with
other International Organizations


Regional Convention on the Recognition of Studies, Diplomas and Degrees in Higher Education
in Latin America and the Caribbean. Mexico City, 19 July 1974.

International Convention on the Recognition of Studies, Diplomas and Degrees in Higher
Education in the Arab and European States Bordering on the Mediterranean. Nice, 17 December
1976.

Convention on the Recognition of Studies, Diplomas and Degrees in Higher Education in the
Arab States. Paris, 22 December 1978.

Convention on the Recognition of Studies, Diplomas and Degrees concerning Higher Education
in the States belonging to the Europe Region. Paris, 21 December 1979.

Regional Convention on the Recognition of Studies, Certificates, Diplomas, Degrees and other
Academic Qualifications in Higher Education in the African States. Arusha (Tanzania),
5 December 1981.

Regional Convention on the Recognition of Studies, Diplomas and Degrees in Higher Education
in Asia and the Pacific. Bangkok, 16 December 1983.

Convention on the Recognition of Qualifications concerning Higher Education in the European
Region, Lisbon, 11 April 1997.



Source: UNESCO (1998), Legal Instruments
S/C/W/49
Page 17


Table 1

Public Expenditure on Education as percentage of GNP and per inhabitant


Continents, major
areas and groups of
countries
Public expenditure on education as
% of GNP
Public expenditure on education per
inhabitant ($)
1980 1985 1990 1994 1980 1985 1990 1994
World total 4.8 4.8 4.8 4.9 126 124 202 252
Africa 5.3 5.7 5.6 5.9 48 40 41 41
America 4.9 4.9 5.2 5.3 307 375 521 623
Asia 4.0 3.9 3.7 3.6 37 39 66 93
Europe 5.1 5.1 5.1 5.4 418 340 741 982
Oceania 5.6 5.6 5.6 6.0 467 439 715 878
Developing
countries
3.8 4.0 4.0 3.9 31 28 40 48
Sub-Saharan
Africa
5.1 4.8 4.8 5.6 41 26 29 32
Arab States 4.1 5.8 5.8 5.2 109 122 110 110
Latin America
and the
Caribbean
3.8 3.9 4.1 4.5 93 70 102 153
Eastern Asia and
Oceania
2.8 3.1 3.0 3.0 12 14 20 36
Southern Asia
4.1 3.3 3.9 3.4 13 14 30 14
Least developed
countries
2.9 3.0 2.7 2.5 9 7 9 9
Developed
countries
5.1 5.0 5.0 5.1 487 520 914 1211

Source: UNESCO Statistical Yearbook '98

S/C/W/49
Page 18


Table 2

Percentage of non-university tertiary education in total tertiary enrolment
in OECD countries, first stage, 1995


Countries Share of non-university tertiary
in total enrolment, first stage
(percentages)
Australia 45.9
Austria 9.0
Belgium 55.8
Canada 46.9
Czech Republic 16.4
Denmark 17.1
Finland 22.7
Germany 13.1
Greece 30.6
Iceland* 17.5
Ireland 45.4
Italy 5.4
Japan 33.6
Korea 27.2
Mexico 10.1
New Zealand 33.0
Norway 40.1
Portugal 22.4
Spain 1.6
Switzerland 46.2
Turkey 26.8
United Kingdom 32.6
United States 45.1
Average of Above 28.0

*Full-time students only
Source: OECD (1997), Education Policy Analysis
S/C/W/49
Page 19


Table 3

10 Leading Exporters of Education Services (Consumption Abroad) in the
World at the Tertiary Level


Host Country Year Total number of students
United States 1995/96 453,787
France 1993/94 170,574
Germany 1993/94 146,126
United Kingdom 1993/94 128,550
Russian Federation 1994/95 73,172
Japan 1993/94 50,801
Australia 1993 42,415
Canada 1993/94 35,451
Belgium 1993/94 35,236
Switzerland 1993/94 25,307

Source: UNESCO Statistical Yearbook (1997).




Table 4
Origin of Students consuming Education Services in the four main supplier countries


Host Country Year
Country of Origin
Number of students
United States
1995/96 China
72,315
Japan
45,531
Korea, Rep. of
36,231
India
31,743
Canada
23,005
France
1993/94 Morocco
20,277
Algeria
19,542
Tunisia
6,020
Germany
5,949
Cameroon
4,676
Germany
1993/94 Turkey
21,012
Iran
10,575
Greece
7,961
Austria
6,680
China
5,821
United
Kingdom
1993/94 Malaysia
12,047
Hong Kong
9,879
Germany
9,407
Ireland
8,987
Greece
8,708


Source: UNESCO Statistical Yearbook (1997).
S/C/W/49
Page 20


Table 5
Summary of Specific Commitments - Education Services
Countries 05.A. 05.B. 05.C. 05.D. 05.E.
Australia X X X
Austria X X X
Bulgaria X X X
Congo RP X
Costa Rica X X X
Czech Republic X X X X X
European Community X X X X
Gambia X X X
Ghana X X
Haiti X
Hungary X X X X
Jamaica X X X
Japan X X X X
Lesotho X X X X X
Liechtenstein X X X X
Mali X
Mexico X X X X
New Zealand X X X
Norway X X X X X
Panama X X X
Poland X X X X
Rwanda X
Sierra Leone X X X X X
Slovak Republic X X X X X
Slovenia X X X
Switzerland X X X X
Thailand X X X
Trinidad and Tobago X X
Turkey X X X X
USA X X
Total Number of Schedules 21 23 21 20 12

Legend:
05.A. Primary Education Services
05.B. Secondary Education Services
05.C. Higher Education Services
05.D. Adult Education
05.E.Other Education Service
Source: WTO Secretariat



S
/
C
/
W
/
4
9


P
a
g
e

2
1

Table 6
Overview of Market Access Commitments for Modes 1, 2 and 3 on Education Services
(Number of Members)*

Sector
Total Number
of Members
(Members with
Full commitment
for Modes 1-3)
a

Cross-border Supply
(Mode 1)
Consumption
Abroad (Mode 2)
Commercial Presence
(Mode 3)
Full
a
Partial
b
No
c
Full
a
Partial No Full
a
Partial No
Primary Education Services
21
(4)
1

11 4 6 17 1 3 7 12 2
Secondary Education Services
23
(5)
2

12 6 5 19 3 1 7 14 2
Higher Education Services
21
(6)
3

16 3 2 18 1 2 7 12 2
Adult Education
20
(11)
4

17 2 1 19 1 - 15 4 1
Other Education Services
12
(7)
5

10 2 - 12 - - 6 4 2

a
Full commitments: no limitations listed, without considering Horizontal Limitations.
b
Partial commitments: limitations listed.
c
No: Unbound, this category may include modal entries with some form of National Treatment committed.
*
Considering the EC and 12 of its Members as one.
1 Austria, Gambia (Mode 3, horizontal limitation), Lesotho (Mode 3, horizontal limitation) , New Zealand.
2 Austria, Ghana, Lesotho, New Zealand, Slovenia (Mode 3, horizontal limitation).
3 Australia (Mode 3, horizontal limitation), Congo RP (Mode 3, horizontal limitation), Lesotho, New Zealand, Slovenia, Switzerland.
4 Austria (except by radio or TV broadcasting), Bulgaria, EU, Gambia, Haiti (only rural centres), Japan (only foreign language instruction), Lesotho,
Mali, Rwanda, Slovenia, Switzerland.
5 Australia (English language instruction), Gambia, Ghana (specialist only), Lesotho, Mexico (mode 3 horizontal limitation, only language/special
education and commercial training), Norway (education not leading to state recognised degrees), US.
Source: WTO Secretariat

S
/
C
/
W
/
4
9

P
a
g
e

2
2

Table 7
Statistic on Types of Measures Sector Specific Section on Market Access (by Number of Schedules)
Sectors and Subsectors Mode a c d e f g h Total
05. Educational Services
1 - - - 3 - 8 3 14
2 - - - - - 4 - 4
3 3 1 - 18 7 19 11 59
4 - - 3 - - - 16 19
05.A. Primary Education Services
1 - - - 1 - 2 1 4
2 - - - - - 1 - 1
3 - - - 5 2 5 2 14
4 - - 1 - - - 4 5
05.B. Secondary Education Services
1 - - - 1 - 2 1 4
2 - - - - - 1 - 1
3 - - - 5 2 5 2 14
4 - - 1 - - - 4 5
05.C. Higher Education Services
1 - - - - - 2 1 3
2 - - - - - 1 - 1
3 2 - - 5 1 6 3 17
4 - - 1 - - - 4 5
05.D. Adult Education
1 - - - - - 2 - 2
2 - - - - - 1 - 1
3 1 1 - 2 1 2 2 9
4 - - - - - - 1 1
05.E. Other Education Services
1 - - - 1 - - - 1
2 - - - - - - - -
3 - - - 1 1 1 2 5
4 - - - - - - 3 3
Legend:
a) Number of Suppliers e) Types of Legal Entity
b) Value of Transactions or Assets f) Participation of Foreign Capital
c) Number of Operations g) Other Market Access Measure
d) Number of Natural Persons h) National Treatment Limitation



S
/
C
/
W
/
4
9


P
a
g
e

2
3

Table 8
Statistic on Types of Measures Sector Specific Section on National Treatment (By Number of Schedules)
Sectors and Subsectors Mode a b d e f g h m n Total
05. Educational Services
1 - 2 3 - - - 3 - - 8
2 - 2 - - - - - - - 2
3 - 2 15 - 5 - 11 - 3 36
4 1 2 5 3 12 1 8 2 1 35
05.A. Primary Education Services
1 - - 1 - - - 1 - - 2
3 - - 3 - 1 - 2 - 1 7
4 - - 2 1 3 - 3 1 - 10
05.B. Secondary Education Services
1 - - 1 - - - 1 - - 2
3 - - 4 - 1 - 2 - 1 8
4 - - 2 1 3 - 3 1 - 10
05.C. Higher Education Services
1 - - 1 - - - 1 - - 2
3 - - 4 - 1 - 3 - - 8
4 1 - 1 1 3 1 - - 1 8
05.D. Adult Education
1 - 1 - - - - - - - 1
2 - 1 - - - - - - - 1
3 - 1 2 - 1 - 2 - 1 7
4 - 1 - - 2 - - - - 3
05.E. Other Education Services
1 - 1 - - - - - - - 1
2 - 1 - - - - - - - 1
3 - 1 2 - 1 - 2 - - 6
4 - 1 - - 1 - 2 - - 4
Legend:
a) Tax Measures
b) Subsidies and Grants
c) Other Financial Measures
d) Nationality Requirements
e) Residency Requirements
f) Licensing, Standards, Qualifications
g) Registration Requirements
h) Authorisation Requirements
i) Performance Requirements
j) Technology Transfer Requirements
k) Local Content, Training Requirements
l) Ownership of Property/Land
m) Other National Treatment Measure
n) Market Access Limitation
S/C/W/49
Page 24


Table 9
Education Services in the GATS Scheduling Guidelines and CPC

Sectoral Classification List
Relevant
CPC No.
Definition/coverage in provisional CPC
5. EDUCATIONAL SERVICES

A. Primary education services
921
Preschool education services: Pre-primary school education services. Such education services are usually provided by
nursery schools, kindergartens, or special sections attached to primary schools, and aim primarily to introduce very
young children to anticipated school-type environment. Exclusion: Child day-care services are classified in subclass
93321.

Other primary education services: Other primary school education services at the first level. Such education services
are intended to give the students a basic education in diverse subjects, and are characterized by a relatively low
specialization level. Exclusion: Services related to the provision of literacy programmes for adults are classified in
subclass 92400 (Adult education services n.e.c.).
B. Secondary education services 922
General secondary education services: General school education services at the second level, first stage. Such
education services consist of education that continues the basic programmes taught at the primary education level, but
usually on a more subject-oriented pattern and with some beginning specialization.

Higher secondary education services: General school education services at the second level, second stage. Such
education services consist of general education programmes covering a wide variety of subjects involving more
specialization than at the first stage. The programmes intend to qualify students either for technical or vocational
education or for university entrance without any special subject prerequisite.

Technical and vocational secondary education services: Technical and vocational education services below the
university level. Such education services consist of programmes emphasizing subject-matter specialization and
instruction in both theoretical and practical skills. They usually apply to specific professions.

Technical and vocational secondary school-type education services for handicapped students: Technical and
vocational secondary school-type education services specially designed to meet the possibilities and needs of
handicapped students below the university level.

Sectoral Classification List
Relevant
CPC No.
Definition/coverage in provisional CPC
C. Higher education services 923
Post-secondary, technical and vocational education services: Post-secondary, sub-degree technical and vocational
education services. Such education services consist of a great variety of subject-matter programmes. They emphasize
teaching of practical skills, but also involve substantial theoretical background instruction.

Other higher education services: Education services leading to a university degree or equivalent. Such education
services are provided by universities or specialized professional schools. The programmes not only emphasize
theoretical instruction, but also research training aiming to prepare students for participation in original work.
D. Adult education
924
Adult education services n.e.c: Education services for adults who are not in the regular school and university stem.
Such education services may be provided in day or evening classes by schools or by special institutions for adult
education. Included are education services through radio or television broadcasting or by correspondence. The
programmes may cover both general and vocational subjects. Services related to literacy programmes for adults are
also included. Exclusion: Higher education services provided within the regular education system are classified in
subclass 92310 (Post-secondary technical and vocational education services) or 92390 (Other higher education
services).
E. Other education services 929
Other education services: Education services at the first and second levels in specific subject matters not elsewhere
classified, and all other education services that are not definable by level. Exclusions: Education services primarily
concerned with recreational matters are classified in class 9641 (Sporting services). Education services provided by
governess or tutors employed by private households are classified in subclass 98000 (Private households with
employed persons).
Source: United Nations, Provisional Central Product Classification, 1991.

__________